I think games generally are improving, but AAA games mostly feel stagnant. It's easy to look back at the best games of previous years, but gloss over the sea of low-effort licensed games and failed experiments. Games are more expensive than ever to make now, and that means there's too much money involved to take big risks and gamble on experimental stuff. Big games by big publishers are forced to play it safe. The average experience has improved if you just picked a random game off the shelf 20 years ago vs now, but you don't get as many of those spiked high points either.
Indie games are better than ever though. It's so much easier now for indie devs to create and share games with the public, and that risk-taking mentality is still strong. The price creep of AAA games isn't a thing, no season passes or battle passes or microtransactions, just games made by passionate players who wanted to scratch a certain itch missing in the market like you say.